A few days ago Canada-based Group NanoXplore announced that it is will merge with Graniz Modal to become a public company that trades in the Canadian stock exchange. NanoXPlore's CEO and President, Dr. Soroush Nazarpour, was kind enough to answer a few questions we had regarding this IPO and NanoXplore's business.
Q: Group NanoXplore is set to become a public company soon, following the merger with Graniz Modal. Can you detail the effect this will have on NanoXplore?
NanoXplore is positioned for rapid growth. We have rigorously demonstrated our end to end production model, from high volume graphene production, through industrial scale compounding, to forming and selling graphene-enhanced plastics in from a full-scale plastic molding facility. We have validated our technology and products by testing with a large number of customers, and having secured initial orders. We have also secured our intellectual property position, having been granted two key patents for graphene production and filed for others related to compounding.
Becoming a public company will allow us to rapidly move forward with our large volume graphene production and plastic acquisition strategy and accelerate sales growth.
Q: On your new web site, you state that your business strategy is to acquire companies, introduce graphene into the products of these companies - which will increase market share. Can you explain the thinking behind this strategy? Is that a sustainable business model?
Bringing a new and disruptive technology and material, such as graphene, to the market can be a long and difficult process if standard business models are followed. Existing supply chain players can be resistant as the benefits, costs, and risks are unevenly spread amongst the players. A new player will often face large barriers to entry with the need to establish new sales channels, build a team with key production and product development skills, and invest in new production facilities.
NanoXplore’s acquisition model minimizes all of these hurdles. The acquired companies bring customer relationships, key skills, existing sales teams, and fully deployed production capability. Existing customers are introduced to the potential benefits of graphene by people they trust and new products are produced in facilities they know. Working with our first acquisition, a plastic molding company near Montreal, we have seen good success with customer being quite open to graphene solutions and sales cycle being pretty fast.
Q: According to your recent filing, NanoXplore's revenues reached $2.55 million CAD in the past 9 months. Is that mostly from material sales, or contract R&D revenue?
A significant majority of this revenue is from product sales. Sales from the first acquired company have grown very nicely, both from its traditional molded products and with new compounded products. We have been able to demonstrate that graphene compounded products can improve performance while also increasing production throughput, offsetting added material costs.
Q: In 2016 NanoXplore was awarded a large $10 million CAD project by SDTC to develop graphene-enhanced electric motor system parts. Any updates on this exciting project?
This project is going forward, targeted at developing graphene-enhanced plastic and plastic composite materials for transportation, specifically for metal replacement and light weighting of commercial vehicles. Light weighting is critical to reduce greenhouse gas emissions for buses and trucks with traditional engines and to accelerate the electrification of commercial fleets. Other components being addressed under the project include graphene enhanced plastics for electromagnetic shielding in autonomous vehicles.
Q: There are many possible graphene applications across many industries. Where do you see graphene's growth coming in the next 3-5 years? Where will graphene make the most impressive impact?
We believe that graphene-enhanced plastics could be the “killer app” that the industry has been waiting for. NanoXplore has been providing customers improved performance, often with little or no cost premium as the graphene cost is offset by production cost reductions.
More broadly, we believe the cost of graphene will continue to fall, galvanising adoption across many industries. We are on track for a heXo-G graphene selling price of less than $10 USD/kg in the next few years; heXo-G would be competitive with carbon black at this price point.